Once you hit an annual household income of $75,000 (£62,000), earning more money didn't make you any happier. In 2021, the happiness researcher Matthew Killingsworth released a dissenting study, showing that happiness increased with income and there wasn't evidence of a plateau.
Most people's happiness rises linearly with income, while about 30% of people are the "happiest," experiencing accelerating well-being once their earnings rise above $100,000.
Their research confirmed what we have discussed above: people with extreme wealth were happier than those with moderately high wealth. Specifically, they showed that people with a net worth of more than $10 million are happier than people with a net worth of $1 million or $2 million.
Precisely, more money can raise our happiness level. However, the study also found that was an “unhappy minority". About 20% of the participants, "whose unhappiness diminishes with rising income up to a threshold, then shows no further progress".
In a large survey of 1.2 million Americans, researchers from Yale and Oxford universities have shown that people who exercise are markedly happier than people who don't — even if they have less income.
The research between salary and happiness suggests similar insights. Even those on the Forbes 100 wealthiest were only slightly happier than the average Americans, according to a study by Ed Diener of the University of Illinois.
Yes, You Can Be Happy Without Money
While money is essential to meet our basic needs, it's not everything. There are things money can't buy, like family and friends. We often overlook the simple things in life that can make us feel the happiness we long for, regardless of our financial situation.
Some new arguments for higher taxes and government spending rest on the claim, supposedly established by empirical studies and by Adam Smith, that money doesn't buy happiness. In reality, however, more wealth does increase human happiness, if only temporarily.
With money, people can fulfill their material need. However, money cannot buy everything such as happiness, friendship and love, health, and appetite. ... Money cannot buy happiness and the real happiness comes when people can give what they have to help other people.
The studies
There have been many studies demonstrating that people are happiest when they spend money on certain things. Therefore, money really can buy happiness if you spend it correctly.
On a scale of one to 10, doubling someone's pay saw their happiness rise by less than 0.2, the researchers found. In contrast, having a partner saw happiness rise by 0.6. Depression, anxiety and unemployment saw happiness levels drop by 0.7 on the scale.
Upper-class adults are also happier and healthier than those in the middle and lower classes. Four-in-ten upper-class adults (42%) say they are very happy with their lives overall. This compares with 32% of middle-class adults and 20% of lower-class adults.
The term upper class refers to a group of individuals who occupy the highest place and status in society. These people are considered the wealthiest, lying above the working and middle class in the social hierarchy.
Although the mass media has convinced many Americans that wealth leads to happiness, that’s not always the case. Money can certainly help you achieve your goals, provide for your future, and make life more enjoyable, but merely having the stuff doesn’t guarantee fulfillment.
The Modern Wealth Survey collected responses from 1,000 adults between the ages of 21 and 75. According to those surveyed, it would take an average net worth of approximately $2.2 million to be considered “wealthy” in 2022. In 2021, survey respondents indicated it would take a net worth of $1.9 million.
On a scale of 1 to 3, where 1 represents “not too happy” and 3 means “very happy,” Americans on average give themselves a 2.18 — just a hair above “pretty happy.” That's a significant decline from the nation's peak happiness, as measured by the survey, of the early 1990s.
Health: Health is one of the crucial things in life money can't buy. No matter how rich you are, even if you are a billionaire, you can never trade your money for health. There are many real-life cases where people sacrifice their health to pursue wealth.
More money brings greater control: Those with higher incomes felt they had more control over negative events and that control reduced their stress. People with ample incomes felt more agency to deal with whatever hassles may arise.
There's no doubt about it—money is impactful. It can change your life in a variety of ways, especially when you come into it suddenly or if you start out with “nothing” and become wealthy over time. While there are many positives to the way money can shape your life, there are also some red flags to be aware of.
Money won't make you feel fulfilled.
No matter how much money you make, it won't necessarily lead to true fulfillment in your life. Fulfillment comes from reaching goals that fulfill the purpose of your existence – and these are things that cannot be bought or sold for any price on this Earth.
A new study shows that having more money does not correspond to more satisfaction. In a survey of five studies of 1.6 million people from 162 countries, researchers found that more money does not lead to greater feelings of fulfillment over time. One reason suggested for this dissatisfaction is the “hedonic treadmill.”
Human beings need money to pay for all the things that make your life possible, such as shelter, food, healthcare bills, and a good education. You don't necessarily need to be Bill Gates or have a lot of money to pay for these things, but you will need some money until the day you die.
You can have depression regardless of how much money you have or make. Although money makes some aspects of life easier, there are other factors that play into mental health and well-being. The wealthy can get depressed the same way people living in poverty can experience depression.